DiNapoli: We’re making money and creating jobs

Comptroller Tom DiNapoli proudly boasted he’s made more than $1.60 for every dollar spent in an investment area that he’s bulked up since taking over the office in 2007: buying stakes in New York companies, including 13 in the Capital Region.

It’s a form of private equity investing that is increasingly common on Wall Street but a bit out-of-the box for the state’s $160.4 billion pension fund, which is mostly made up of stocks and bonds. DiNapoli, a Democrat, said these private equity investments have helped the fund meet its annual targets, and also helped create nearly 4,000 jobs around the state.

“It’s proven to be a win, win for our state’s economy and certainly for the state pension fund,” DiNapoli said. “When we’ve looked at the performance of these funds, we’ve exceeded our objectives. … I have tremendous confidence in it.”

This private equity program is managed by 18 private fund managers. Since 2000, the state has spent $684 million into 252 companies — and DiNapoli hopes to allocate another $393 million. Most of that money, some $505 million, is still locked up, but the pension fund sold it stake in 71 companies for an aggregate $293 million. It had paid $179 million, in aggregate, for a stake in those companies.

That’s a return of over $1.60 for every dollar invested, DiNapoli proclaimed, and an average return of over 20 percent over the last five years. But it doesn’t account for the money still locked up in various investments, which explains why the gains DiNapoli touted are far above industry averages. A DiNapoli aide declined to say what this $505 million is currently valued at.

But the CEO of one of the companies, East Greenbush-based Autotask, said the $6.3 million it has received from the comptroller’s office, most recently in 2008, allowed it to quadruple the number of employees it currently has in Rensselaer County. There are now 160 people there, including engineers, and roughly 400 around the world.

Autotask offers the templates for information technology companies who help small and mid-sized businesses. As CEO Mark Cattani explained, Autotask would write software for an IT company who would configure it to the needs of, say, a dentist’s office or a law firm. Autotask now has over 5,300 companies in 70 countries.

Cattani said Autotask started with “friends and family money,” and said the pension fund helped it break through to “the next level.”

“Without that funding, they would have chosen to go somewhere else or there would be no company. It’s as simple as that,” Cattani said. “Hopefully, it’s going to be a big success for New York State.”